The Top 4 Challenges Your Small Business Will Face
The Key Challenges for a Small Business and How to Fix Them
No company is immune to the consequences of mistakes, poor planning, or bad luck — no matter how big or successful. Here are some key potential pitfalls your small business could face, and how you can avoid them.
1. Cash Flow Troubles
Cash flow is one of the most important aspects of a successful startup business.
Many small businesses that fail do so because of poor cash flow management. Late customer payments, seasonal fluctuations, emergency expenses, rising costs, and a number of other factors can create a cash crunch that threatens your company’s ability to survive and grow.
What can you do?
Start by filling out a cash flow statement using a template, which can show you when and where money flows in and out of your business. Cash flow statements can also aid in forecasting cash flow hazards — allowing you to plan accordingly. There are several commercial cash flow tools that can help you better manage your business.
If you are short on cash, your business may have to cut costs, borrow money, generate more income, or do some negotiating. Beyond putting money aside during your more prosperous months, explore what costs you can reasonably trim without obstructing operations, and find creative, budget-conscious ways to market your good or services.
Expanding sales to current customers, reducing inventory, using free communication tools like Skype, and reworking arrangements so you receive compensation sooner are just a few of the ways a business can save money and cut costs. You may also consider offering clients a discount for speedy payments. Seeking better rental terms could leave you with more cash as well and if you haven’t raised prices in a while, it might be time to do so.
While you don’t want a debt overload, a modest business loan, credit line, zero-interest card, or other types of borrowing can help you through temporary cash flow problems. Cash flow loans are one option but beware of high interest rates and other possible downsides. Other possibilities could include accounts-receivable and inventory-based loans. If you’re considering credit, weigh the pros and cons and ensure that you've read the fine print.
2. Administrative Overload
Perhaps you've started a landscaping business because of your green thumb and wanted to make a living in the fresh air. Yet here you are, sitting at a desk, overwhelmed by paperwork, unsent invoices, lost bills, and misplaced client notes.
Without proper organization and support, a small business can become the victim of its own success. One missed customer appointment can cause client frustration — damaging your company’s reputation — and an unanswered call can send a potential client to a competitor.
Even if you’re well organized, administrative tasks may be taking too much time away from your core business and will slowly chip away at your entrepreneurial energy.
What can you do?
Look at your pain points to determine where you need help. Online scheduling software can automate reminders, and a virtual assistant can handle appointments and calls. If billing, payments, collections and accounting have become speed bumps rather than a smooth ride that propel your business, consider a bookkeeping service to get your records in shape and your car back on track.
3. Cyber Insecurity
Any device with an internet connection faces the risk of a cyberattack.
A small business in particular can’t afford to have ransomware hobble its computers or experience a breach that exposes sensitive data to cyber criminals. Besides direct losses, businesses face the possibility of legal action or fines if their consumer data is compromised.
What can you do?
By creating a custom small business cybersecurity plan, you and your team can be prepared for any type of attack, malware, or infiltration that may occur. Check the Federal Communications Commission’s (FCC) 10 cybersecurity tips* for a small businesses, which brings attention to providing security training to employees, using a firewall to protect your network, backing up important business data, controlling and limiting access to data, and securing wireless networks.
4. A Poorly Made Website — Or No Website at All
A good website isn’t a luxury. It doesn’t need to cost a fortune, and the lack of a website may cause your business to lose important sales. A vast majority of consumers start the path to a major purchase with online research.
A website can be a potential customer’s first introduction to your company. Consumers use company websites to find or engage with local businesses and yet many small businesses don’t even have one.
If you want to make a good first impression, inspire trust, tell consumers about your business, and let them know how to contact you, you should have an appealing, easy-to-navigate website that delivers the message of your product clearly and concisely.
What can you do?
Hiring a professional designer to build your website is a great start to getting your brand out into the open. To find one, do some research online, like any diligent consumer, or ask for recommendations from other small businesses with appealing websites.
Tip: If you find a company’s website that looks appealing, you can check the bottom of the website to see what design service they used.
If cost is a problem, or you want to do it yourself, try a free or low-cost website builder. Wordpress, Weebly, and Wix all offer well-designed templates and other features that can give your business a polished presence. You may find that the right combination is a do-it-yourself site with assistance from a designer.
